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Asset injection prospect boosts HHM shares
By Jin Jing (China Daily)
Updated: 2007-03-05 09:19
The injection seems to be exactly what the doctor ordered for the company, which is working towards getting listed on the Hong Kong Stock Exchange. HHM's share prices surged to daily limits on every day of the week after the firm announced an asset injection from its parent company on January 29. The company's stock price rose a combined 104 percent to close at 67 yuan on February 5, one week after the statement was released. It soared another 136 percent to close at 77 yuan on Febuary 16, the last transaction day before the break for Spring Festival. HHM will issue a total of 400 million new shares to buy a package of assets from its parent company, China State Shipbuilding Corporation (CSSC), from Baosteel Group and Shanghai Electric Group Co Ltd, and to raise 3 billion yuan from no more than seven large-scale State-owned companies, according to the firm's statement to the Shanghai Stock Exchange on January 29. HHM plans to raise a total of 12 billion yuan in assets and capital at the new share-issuing price of 30 yuan per share. The injected assets include 100 percent of shares in Shanghai Waigaoqiao Shipbuilding Co Ltd, 100 percent of shares in Chengxi Shipyard Co Ltd and 54 percent of shares in Guangzhou CSSC-Oceanline-GWS Marine Engineering Co Ltd, which is reportedly worth 9 billion yuan. After the asset injection, HHM's main business will include shipbuilding and ship repairing in addition to its original business of marine diesel engine manufacturing. "The three main businesses have structured a complete and independent industry chain for HHM. The company will become a leading domestic shipbuilding unit in CSSC," says Zhao Xuegui, an analyst at Everbright Securities. The asset injection proposal is still waiting for approval from the China Securities Regulatory Commission (CSRC). (For more biz stories, please visit Industries)
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News of an asset injection from Hudong Heavy Machinery Co Ltd's (HHM's) parent company has given China's largest marine diesel engine manufacturer's share prices a shot in the arm.